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Inside This Special Report ATTENTION FIRST TIME HOMEBUYERS! Home Buying ABC’S Stop Making Your Landlord Rich And Build Your Financial Future! Are you tired of making your landlord wealthy? If you are paying rent every month, that is exactly what you are doing. Enough Already!! Buying a home today is easier than ever before. Many people who thought that buying a home was simply out of their reach are now enjoying a new lifestyle in their very own home! That’s right, no more rent, and they enjoy the benefits of home ownership, equity build up, and tax advantages. For most homeowners, buying a home is the smartest financial decision that they ever made. Real estate values have risen over the last 60 years. Of course, sometimes there are peaks and valleys, but in the long term the trend is a consistent increase. In fact, most American homeowners would be financially broke at retirement if it weren’t for one saving grace – the equity in their home. Equity is simply the difference between how much the home is worth and how much you owe on it. For example, if your home is worth $110,000 and you owe $70,000, the equity is $40,000. Your equity should increase every month because when you make a payment, the amount that you owe on the home goes down. PLUS, since values typically increase, it is worth a little bit more every month too! This worth more, owe less situation is called equity build-up. Additionally, all of the interest and property taxes that you pay on your home are fully tax deductible! (Check with an accountant or tax specialist). And we haven’t even touched on the intense pride you’ll feel when you pull into the driveway of your own home. No more answering to a landlord for you! It is easier than you may think! There are lots of ways to buy a home, and often for the same or less than you are paying in rent. Even if you have little money for a down payment or credit problems, chances are that you can still buy a home! It just comes down to knowing the right strategies and working with the right people. More on this later, for now, let’s look at some of the general things you’ll need to know about buying a home. This is important because once you discover that you can indeed buy a home, you need to understand the process. Approached properly, buying a home can be a fulfilling experience. The key to avoiding the pitfalls and traps that plague many home buyers comes down to one thing:
Buying a home is a fairly complicated undertaking, but if you’re armed with the proper knowledge and have a solid plan, it can be a whole lot easier. It all starts with understanding the home buying process, how the “system” works, and what can happen to the typical unprepared home buyer. First, having a step-by-step plan will make the entire process much easier to handle. Here is the basic 9-step home buying plan that has saved thousands of dollars for many people like yourself: Step 1 – Determine if buying a home now is
Step 3 – Study the real estate market.
Step 5 – View specific homes. Step 6 – Pick a home that meets your needs. Step 7 – Analyze the value. Step 8 – Negotiate the contract. Step 9 – Close and move. The first step is to determine if buying a home is even in your best interests. Most of the time, buying a home is one of the smartest financial decisions that a person can make. But not always! In meeting with lots of people over the years, I’ve learned that only after examining your overall financial picture can you discover if buying a home is the right thing for you to do. There are lots of factors to consider, such as the effect that buying a house will have on your long and short term goals. I have seen situations where buying a house was not in the person’s best interest at that time. Once you are sure that buying a home is the smart choice for you, it’s time to get busy. WAIT A MINUTE!! This does not mean jumping in your car and tearing down the street to find your dream home. Not so fast! Taking the time to do things right will save you many hours of frustration and thousands of dollars. What happens if you take off on a journey without having a map or plan – not knowing where you’re going? That’s right… YOU GET LOST!! Same thing when buying a home. Except that the thing that gets lost is not you, it’s thousands of your hard earned dollars! The purpose of this report is to make you aware of the common mistakes that home buyers fall into and how to avoid them! Having the right information leads to making smart decisions. It doesn’t matter if this is your first home or if you’ve bought a dozen before. No matter what, it makes sense to be armed with the facts! So, once you have examined your personal financial situation and given yourself the green light to buy a home, the next step is to get pre-approved for a mortgage. In Obtaining a Loan Status Report (LSR) from a reputable lender is smart for two main reasons: i. You’ll have less stress and more confidence while home shopping because you’ll know exactly what you can afford. ii. In Although you certainly don’t have to use one, the services of a good real estate agent can be quite valuable during this stage. Good agents know who the reputable lenders are. The ones that will help you answer questions like the following without pushing their own agenda: Do I want the lowest rate with points or a higher rate with no points?
Do I want to “lock-in” or float the interest rate? Do I want a conventional or FHA or VA loan? Fully amortized or balloon payment? I am not saying that most mortgage companies are full of crooks, liars, and cheats. Many are excellent at what they do. It’s just that if you pick a lender at random you may get one of the bad ones. And without knowing what you want or need, that type of lender will put you into what they want for you…which may not be in line with your goals. In the real estate game, the field of financing is covered with hurdles and quicksand. In no other part of the process can you lose so much money…and not even know it! There are no hard and fast rules to answer many of the questions you’ll be faced with. That’s because everyone’s situation is unique! What’s best for you will probably be different than the family down the block. And that’s where an experienced honest lender comes in! The lender is going to ask you lots of questions in order to prepare that LSR such as (you should be ready to answer these questions): Where do you work? Are you self-employed?
How much do you make? How long have you been there? How much cash do you have in the bank? How is your credit rating? What is your FICO score? How much revolving debt do you have? Can I see your last two years tax returns? How much will you be putting as a down payment? Do you know what type of mortgage you want? And there are questions that you need to ask the loan agent before you commit to working with them: 1. Are you funding the loan with your own funds or “brokering” it? 2. Exactly what fees will you be charging me? 3. Who makes the final approval decision? 4. Is the loan underwriting done locally? 5. When can I expect an answer? 6. Will you put everything in writing and sign it? 7. Given my goals, what loan program do you recommend and why? Bottom line: Shop around and talk to several different lenders. Takes notes and compare what each has to offer. Costs can vary substantially from one lender to another, so do your homework! Yes, getting that Loan Status Report is smart, and it is the first step that you should take once you decide to buy a home. Once you thoroughly understand financing and have obtained a Loan Status Report, it’s time to do the leg work necessary to find your home and get the best possible price on it. First identify the neighborhoods that you like and that are in your price range. If you have lived in your area for awhile, you may have some in mind already. Think about what you really want in a house. Are you looking for a big yard or something with less maintenance? A new home or a place more mature and established? One story or two? Also decide how many bedrooms and baths you need, along with items such as a den, garage space, fireplace, swimming pool, etc. Hopefully, you’ll be able to find what you want and stay in your price range. If not, you may need to adjust either what you want or your budget. While you are looking, keep one thing in mind: THERE IS NO SUCH THING AS THE ‘PERFECT” HOME! You certainly want to make sure that the home that you buy meets your needs, but you will drive yourself crazy if you go through dozens and dozens of homes searching for the “perfect” home. Make a list that includes your price range, all the items that you must have in your home, along with the items you don’t want. Take it with you whenever you look at homes, so you don’t get sidetracked. You will want to thoroughly research the values in your area. You need to know what people are asking for their homes, and most importantly, what they are selling for. You want to be on the lookout for and avoid areas that are experiencing depreciation in value. Once you have a home that you are interested in, you need to find out more information. Try to get the answers to the following questions before you start any negotiations. You need to know as much as possible about the sellers position and motivation. 1. Why is the seller selling? The answer to this question will tell you a lot about the seller. Everyone selling their home has a reason. The seller may have been transferred, bought another home, be going through a divorce, or need to cash to pay off debts. All of these things can be to your advantage when negotiating! 2. Are their any defects or structural problems with the house? Watch the seller very carefully when you ask this question. If they look away or get nervous, HIT THE ROAD! Most states now have mandatory property disclosure laws that require the seller to fully disclose any problems with the property. 3. How long has the home been on the market? If the home has been on the market for many months, you need to find out why. Is it simply because they are asking too much for it, or are there much deeper problems? Also, the seller may be more anxious to sell as the months go by – a big plus for you. 4. Is the seller offering any special financing or assistance.? The seller may have an assumable loan or be willing to finance the purchase and carry the mortgage themselves. They also could pay some of your loans costs or points to help you get a lower interest rate. 5. Are there any repairs the seller is planning on doing? This question is similar to number 2, but still needs to be asked. The answers to this question can give you valuable insight as to how the home has been maintained, and also give you some negotiating leverage. When you have answers to these questions, you will have a good feel for the sellers situation and the house itself. You’ll be in a position to decide if you want to move forward with the house or not. CONTRACT AND NEGOTIATION If everything looks good, you may want to proceed in the process. The next step is to write up an offer to purchase. This is where the information you learned from questioning the seller can be quite useful. For example, if the seller has been transferred to another city, they may be very motivated to sell. There are many different strategies for negotiating; but the one that I have seen produce the best results, is not all that difficult. It starts by studying the market data to determine what the fair market value is for the house. Your objective is to make your offer at a price that is lower than what the seller has in their mind as their “bottom line,” but is close enough that they say “Oh, I guess we will go ahead and take it.” Keep in mind the three basic options that a seller has when presented with an offer: 1) Accept the offer. 2) Reject the offer. 30 Make a counter offer. The seller will always want to accept the offer if possible, because if they sign it, they will have a deal that the buyer is bound to. If they make a counter offer, the buyer is “off the hook,” and is no longer obligated contractually. The price is always the focal point of the offer, but there are lots of other areas that you need to address and pay close attention to also. In your offer, be as specific as possible about every aspect of the transaction. Details that are not clear or are left out can lead to big problems down the road. Some of the items that you want to be sure to spell out in detail when putting together your offer include: · PRICE · DOWN PAYMENT · EARNEST MONEY DEPOSIT · INTEREST RATE · CLOSING/POSSESSION DATES · LOAN COSTS - WHO PAYS WHAT · PRORATIONS · APPRAISAL – WHO PAYS · HOME PROTECTION PLAN · INSPECTIONS – WHAT TYPE · ITEMS INCLUDED (WASHER/DRYER, REFRIGERATOR, ETC) · TITLE/ESCROW COMPANY/ATTORNEY · CONTINGENCIES – WHAT AND HOW LONG Spelling out every detail can save lots of confusion and misunderstandings, and keep you out of a costly court battle! And remember, in One area where you need to be very careful is contingencies. These are things that must or must not happen in order for the transaction to be valid. For example, the purchase may be contingent upon you getting approved for your financing, on getting a favorable inspection report, or many other things. Make sure to spell out the contingency clearly, as well as what specifically will happen if the contingency is or isn’t met. The important thing is to keep your goals in mind throughout your negotiations. This will guide you, and help keep you from making bad decisions based on emotion. Keep one important fact in mind: There is always another house! The mistake is letting their emotions get out of control! Of course, it is impossible to completely remove all of your emotions. After all, if you didn’t have some emotion, you wouldn’t want to buy a home in the first place. The key is to remember that you are entering into a complex business deal; one that can effect your financial situation for years to come. Just try to keep as focused as possible on the dollars and cents, and don’t allow yourself to “get caught up in the moment” and make foolish decisions that you will regret later. If you start to feel pressured or uncomfortable, step back and review your goals. Don’t let yourself be bullied around. Remember that the seller usually needs to sell that house a lot more than you need to buy it! CLOSING AND MOVING After all of the terms and conditions of the contract have been mutually agreed upon by both you and the seller, you still need to stay on your toes. Many people tend to relax and end up dropping the ball. There are at least a hundred things that can go wrong and foul up the sale. Stay in contact with all parties involved in the transaction – mortgage company, real estate agent, title company, escrow company or attorney, appraiser, inspector, etc. You will want to make sure that all of the terms of the contract have been met, and do a “walk-through” inspection of the home prior to closing. All of your preparation and planning will pay off handsomely when you move into your new home! SO WHERE DO WE GO FROM HERE? The only way to properly create your own home buying plan is to examine your personal financial situation AND your goals for the future. The next step is entirely up to you, but if you are serious about buying a home and avoiding the mistakes that can cost you thousands of dollars, here’s what I recommend. In about a half hour, we can determine what the best course of action is for you to take. There Will Be No Obligation, No Pressure, And No Tricks… Just solid, helpful, useful information! After we meet and you are armed with all of the facts, you will be prepared to make your decision about how you want to proceed. You’ve probably figured out that I am not like most real estate agents. I concentrate on providing quality information to those who need it. I know that you may be asking that question in your mind. I know that’s not what most real estate agents do, and it may seem a little odd. It’s just that I have learned that good things happen when you concentrate on really helping your customers. Yes, I make my living selling real estate; and yes, I would love to handle your purchase. BUT ONLY IF THAT’S WHAT YOU DECIDE TO DO AFTER YOU HAVE ALL OF THE INFORMATION TO MAKE AN INFORMED DECISION! In less than an hour you’ll have all of the facts and information you need to make smart decisions for your future. We’ll discuss your situation and look at the different options that you have. Well, there is not much more for me to say. The next step is up to you. As I said before, there is absolutely no cost or obligation attached to your free consultation. Pick up the phone and call me now while you are thinking about it. I know that you may be a little skeptical, but one phone call isn’t much to risk, especially when you could save yourself a lot of aggravation and thousands of dollars! You can reach me at 602-617-3245. I look forward to hearing from you. Merry Silbaugh, Accredited Buyer’s Agent, Certified Residential Specialist P.S. Procrastination keeps more people from ever reaching their dreams than anything else. Don’t miss out on information that can make all the difference in your financial future! | ||||||||||
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